State Tax Filing Season Officially Opens

FTB Archive Disclaimer: Archived content is not current and may contain broken links. It remains online for historical reference or research.
The search function above allows you to search archived and current content separately. If you need archived content in a different format,
contact us.

Sacramento — The Franchise Tax Board (FTB) today announced
it is now accepting 2011 state tax returns. Also, FTB provides the following updates
on law changes and filing services.

Final filing date is Tuesday, April 17 - FTB will consider
tax returns and payments mailed or submitted on April 17, as timely.

Individual tax rate decreases - The top tax rate dropped one-quarter
percent from 9.55 percent to 9.3 percent due to the expiration of tax increases
enacted two years ago.

Standard deduction - The standard deduction for single or filing
separately tax statuses increased from $3,670 to $3,769. For joint, surviving
spouse, or head of household filers, it increased from $7,340 to $7,538.

Exemption credit increases - The dependent exemption credit
increased from $99 to $315 per dependent. The personal exemption amount for single,
filing separately, and head of household filers increased from $99 to $102. For
joint or surviving spouses, it increased from $198 to $204.

Child and Dependent Care Expenses Credit - Beginning in 2011,
this credit is non-refundable. Individuals who pay for dependent care to seek
or maintain employment may qualify for this credit worth up to $1,125.

Check your county tax bill when deducting real estate taxes -
FTB advises taxpayers to examine their county property tax bill to determine the
deductible and nondeductible portions to report on their itemized deductions.
Taxpayers should not rely on the federal Form 1098, Mortgage Interest Statement,
which often reflects the total amount paid to the county, including other parcel
taxes and fees that are not deductible.

Starting in 2012, FTB plans to add reporting requirements related to real estate
deductions such as property parcel number, deductible, and nondeductible amounts.
For samples of all counties’ property tax bills and guidance on determining which
taxes and fees are deductible, visit ftb.ca.gov and
search for real estate
tax.

Use tax look-up table - New this year, taxpayers can use a
“look-up” table to report their use tax obligations on their state return. The
estimated amount of use tax due is based on the individual’s adjusted gross income.
A use tax liability typically occurs when a California consumer or business purchases
tangible items for their own use from an out-of-state retailer that does not collect
the California use tax. Taxpayers can go to boe.ca.gov for
more details.

New Jobs tax credit -
This incentive provides a credit of up to $3,000 for each added qualified
full-time employee hired by a qualified small business employer.
Funding is limited to $400 million. As of January 1, $324 million remains available.
The credit must be claimed on a timely-filed original (not amended) 2011 return
received before the $400 million limit is exhausted.

In general, employers qualify for the credit if they employed 20 or fewer employees
in the prior year. They must have a net increase in qualified full-time employees
in 2011 compared to the number of full-time employees employed in the prior year.

Net operating losses suspended - For 2010 and 2011, net operating
losses from prior years cannot be deducted by certain taxpayers. The net operating
loss suspension rules do not apply to taxpayers with net income of less than $300,000
or with disaster loss carryovers.

Voluntary Contribution Funds -
Taxpayers can contribute to one or more charitable causes directly from the state
tax form. New on the 2011 tax return are the:

Free Do-it-Yourself Services - FTB encourages
taxpayers and practitioners to explore its many self-service applications available
through FTB's website:

Free online filing in minutes - FTB has two free e-file
programs: ReadyReturn is
for taxpayers who used the single or head of household filing status the prior
year, had one employer, claimed no more than five dependents, and took the standard
deduction. ReadyReturn pulls data from wage reports and past tax returns
to generate a completed return online. For more complex filing needs, CalFile is
the state's other no-cost, easy-to-use e-file option that is available to more
than 6.4 million taxpayers. CalFile accepts taxpayers with income of up to $333,134,
itemized deductions, and some tax credits.

Try Live
Chat - FTB's Live Chat allows you to ask an FTB representative
general personal or business income tax questions and get help with FTB’s website.

Check Your Refund Status -
After filing the 2011 tax return, taxpayers can
use this service to see where their refund is. E-filed returns claiming refunds
and opting for direct deposit are generally issued within seven days and mailed
refund checks are generally sent within two weeks. Paper-filed returns take
longer, up to six to eight weeks depending on the time of year the return is
filed. This service is also available in Spanish.

Pay Taxes
Online - FTB's Web Pay allows individuals
and businesses to authorize a payment from their
bank account to pay their return balance due or extension payment. Payment
must be made on or before April 17, to avoid penalties and interest. Taxpayers
can also make estimated tax or any bill payments online, and sign up for email
reminders of upcoming estimate payment due dates. Taxpayers can schedule payments
up to one year in advance. For a fee, taxpayers can pay their taxes with their
American Express, Discover/NOVUS, MasterCard, and Visa cards.

Request a Monthly Payment Plan -
FTB offers monthly installment payment plans to people experiencing
a financial hardship. Taxpayers who owe less than $25,000 and can repay their
balance owed within five years generally qualify. To see if you qualify and to
sign up, go to ftb.ca.gov and select installment agreement request.

Phone service -
FTB provides automated toll-free phone service at 800.338.0505. To
speak with a customer service representative, FTB staffs its general toll-free
phone line, 800.852.5711, from 7 a.m. to 5 p.m., weekdays excluding state holidays.

Field Offices -
FTB has six regional field offices that provide walk-in service from 8 a.m.
to 5 p.m., weekdays in Los Angeles, Oakland, Sacramento, San Diego, San Francisco,
and Santa Ana. For directions, go to ftb.ca.gov and
select Contact Us.

Tax Tips

Volunteer Income Tax Assistance - Starting February 1, more
than 1,000 centers statewide open through the Volunteer Income Tax Assistance
(VITA) and Tax Counseling for the Elderly (TCE) programs. These sites offer free
help with tax form preparation. Some offer services in Spanish, Chinese, Vietnamese,
and Korean. For information on locations throughout California, go to ftb.ca.gov and
click on the free filing assistance link.

Federal Earned Income Tax Credit (EITC) - This is a federal
incentive for low-income individuals and families. Taxpayers earning less than
$49,078 can qualify for a refundable credit that can total up to $5,751. “Refundable”
means that you do not have to have a tax liability to get a refund check from
the government. If you think you might qualify, go to the IRS website at irs.gov and
search for EITC Assistant. California has no comparable state credit.

Federal Small Business Health Care Tax Credit
- This federal incentive
helps small businesses and small tax-exempt organizations afford the cost of
providing health care for their employees. The credit is worth up to 35 percent
of a small business' premium costs. For more information, go to irs.gov and
search for affordable care act tax provisions.

Record keeping - Keep a copy of your state tax returns and
all supporting records. FTB may request information from you regarding your tax
return at any time within the California statute of limitations period, which
is generally four years from the return's due date.

Keep your address current - Remember to update your address
if you move. This year FTB had $17 million in tax refunds returned as undeliverable
because FTB did not have the recipient’s current address on file. Change your
address online using the
Access Your Account
feature or call 800.852.5711.

For more information on other taxes and fees in California, visit: taxes.ca.gov.